The partnership lasted for about four years and had accumulated losses of more than Tsh 24 billion (US$19 million). The government repurchased the shares in 2006 and it is once again a wholly owned government company. Over the years, it has served a variety of domestic, regional, and intercontinental destinations. Despite being the national airline, its market share has deteriorated over the years from 19.2 percent in 2009 to 0.4 percent in 2011.[2]

History

ATC (1977 – 2002)

Air Tanzania Corporation (ATC) was established on 11 March 1977 after the breakup of East African Airways (EAA), which had previously served the region. The liquidation of EAA followed its accumulation of US$120 million of debt.[3] Prior to its formation, EAA had served the region since 1946 during the British rule of East Africa. After the dissolution of EAA, Kenya and Uganda also formed its own flagcarriers: Kenya Airways and Uganda Airlines respectively.It was wholly owned by the government.

According to Sir Andy Chande, the founding Chairman of the board, Tanzania and Uganda did not receive a fair share of the former carrier's assets despite being equal partners. The airline commenced operations with a Douglas DC-9-32 leased from Kenya Airways and purchased an additional two Boeing 737, financed by a U.S. bank.[4] It also leased an aircraft from Air Madagascar. Four Fokker F27s and four DHC-6-300 Twin Otters were added in 1980. Due to less demand, two of the Fokker 27s were disused in 1981. These aircraft returned to service in 1983 but was once again removed.[5]

In May 1991, Air Tanzania began operating a Boeing 767-200ER that it leased from Ethiopian Airlines, but this aircraft proved to be too large and was returned to the lessor in February 1992.[6][7] The airline reported a profit of US$ 650,000 in 1994.[8]

During the nineties, the airline's acronym ATC was humorously referred to as Any Time Cancellation due to its unpredictable flight schedule.[9][10]

Alliance Air

In 1994, Air Tanzania joined with Uganda Airlines and South African Airways (SAA) to form Alliance Air. Air Tanzania had a 10 percent stake in the venture.[11] Flights operated from Dar es Salaam to London–Heathrow via Entebbe on a Boeing 747SP initially, and then a smaller Boeing 767-200. This venture ceased operations in October 2000, after accumulating losses of about US$50 million.[12] The losses had been funded by Transnet, the parent company of SAA, through April 2000. When Transnet refused to continue funding the deficit, Air Tanzania accused SAA of using Alliance Air "as a Trojan Horse to take over national airlines in the region".[13]

Creation of a new company, Air Tanzania Company Limited, which would be incorporated as a limited liability company, under the Companies Act to take over the operating assets and specified rights and liabilities of ATC.

A second new company Air Tanzania Holding Company would be created to take over the non-operating assets and all other liabilities of ATC.

Of the eight, four airlines carried out due diligence – South African Airways, Kenya Airways, Comair, and Nationwide Airlines.[17] By 19 September 2002, the bid deadline date, only SAA had submitted a bid. Kenya Airways and Nationwide Airlines had informed the government that they did not intend to submit bids.[19][17]

ATCL (2002 – 2006)

The Tanzanian government selected South African Airways (SAA) as the winning bidder. After signing an agreement with the government, SAA in December 2002 purchased a 49 percent stake in Air Tanzania Company Limited (ATCL) for USD 20 million. USD 10 million was the value of the government's shares and the remaining USD 10 million was for the Capital and Training Account for financing Air Tanzania's proposed business plan.[17]

As the strategic partner, SAA planned to create its East African hub in Dar es Salaam to form a "Golden Triangle" between southern, eastern, and western Africa. It also intended to replace ATCL's fleet with Boeing 737-800s, 737-200s, and 767-300s. It also planned to introduce regional routes, including routes to the Middle East and west Africa. The government was expected to sell 10 percent of its 51 percent stake to a private Tanzanian investor, thereby reducing the government's ownership to a non-controlling interest in ATCL.[20]

The new Air Tanzania airline was launched on 31 March 2003, offering direct flights between Johannesburg and Dar es Salaam, but also to Zanzibar and Kilimanjaro.

Air Tanzania recorded a pre-tax loss of almost USD 7.3 million in its first year following privatisation. The loss was attributed mainly to the inability to expand the network as quickly and extensively as originally planned. It had been hoped to launch services to Dubai, India, and Europe, but these were delayed as Air Tanzania had only Boeing 737-200s in its fleet. The development of Dar es Salaam as an East African hub for the SAA alliance had also not proceeded as quickly as planned.[21]

Air Tanzania suspended on 31 January 2005 one of its few regional services, Dar es Salaam to Nairobi, following intense competition from Kenya Airways on the route. The airline, however, reaffirmed its intention to launch long-haul services within a year from Dar es Salaam to Dubai, London, Mumbai, and Muscat.[22]

The Tanzanian government announced on 31 March 2006 that it would dispose of ATCL following four years of losses, which amounted to TZS 24.7 billion. The director- general of the Tanzania Civil Aviation Authority, Margaret Munyagi, said "Air Tanzania was in a worse state than before it was taken over by SAA." SAA, however, claimed the Tanzanian government was "not serious" for failing to release about USD 30 million, which was needed to implement Air Tanzania's business strategy to reverse continued losses.[23]

On 7 September 2006, the Tanzanian government bought SAA's 49 percent stake in ATCL for USD 1 million, hence officially terminating its partnership with SAA. The venture collapsed due to the partners' different interests in the business.[24]

Relaunched ATCL (2007 – present)

After the partnership between Air Tanzania and South African Airways (SAA) was officially terminated, the government set aside TZS 13 billion for Air Tanzania to start using its own ticket stock (number 197) instead of the stock of SAA (number 083), changing revenue systems and fuel services, preparing e-ticketing and accounts systems, using a new trademark, and clearing outstanding debts.[25]PresidentJakaya Kikwete appointed Mustafa Nyang'anyi,[26] a veteran politician and diplomat Ambassador, as the board chairman, and former Parastatal Pensions Fund director general David Mattaka as managing director and chief executive officer.[27]

The government also in 2007 began lengthy discussions with China Sonangol International Limited to privatize ATCL. Those discussions were ultimately unsuccessful and ended in 2010.[28]

The Parliamentary Committee on Economic Infrastructure expressed its concern about no funds being set aside for ATCL. According to the opposition, the airline has debts amounting to USD 4 million due to SAA.[30] A member of the National Assembly of Tanzania also asked the government to claim compensation from SAA for taking aircraft spare parts from the Air Tanzania hangar at the Kilimanjaro International Airport to South Africa.

In August 2007, Air Tanzania selected the Revenue Accounting Bureau Service offered by Mercator, the airline IT solutions provider of the Emirates Group. The airline was promised significant benefits. Revenue would be enhanced through accurate billing and verification, accounting costs would be lowered, productivity would be raised, and training costs would be eliminated.[31]

The leased Airbus A320.

Air Tanzania was relaunched in September 2007 after the dissolution of the partnership with SAA with two leased Boeing 737-200s in its fleet. The new brand represented the company's name, Mount Kilimanjaro and the airline's international destinations. The introduction of the airline's new logo on a leased Airbus A320 bore the image of the imposing giraffe– Tanzania's national icon, to replace the South African Airways flag symbol.[32][33] On 1 October 2007, the revamped Air Tanzania made its inaugural flight on the Dar es Salaam to Mwanza via Kilimanjaro route.[34]

In February 2008, the carrier acquired two de Havilland Canada Dash DHC 8-Q311s. In December 2008, the Tanzania Civil Aviation Authority (TCAA) withdrew Air Tanzania's Air Operator Certificate because the airline had failed to meet the standards of the International Civil Aviation Organization. Two weeks later, the International Air Transport Association banned the air carrier from all aviation transactions and informed all travel agencies and other aviation companies to stop all transactions with Air Tanzania until further notice.[35] The certificate was restored in January 2009, with both the TCAA and Air Tanzania claiming there had never been any doubt about the airworthiness of its aircraft.[36]

Press reports in July 2010 indicated that Air Tanzania was in serious discussions with Air Zimbabwe to establish extensive and substantive management collaborative arrangements. Both airlines were reported to be in search of strategic partners to shore up their operations, which had been in decline over the past decade.[38]

Air Tanzania was effectively grounded in March 2011, after its sole remaining operational aircraft, a Bombardier Q300 was sent to South Africa for heavy maintenance, leaving the carrier literally stranded due to the company having failed to plan forward to have a suitable aircraft leased for the duration. At the same time the other Bombardier Q300 was undergoing a heavy C-check at ATCL´s hangar at the Dar es Salam Terminal. The aircraft was stranded there due to lack of funds to import spare parts from abroad.[39] Air Tanzania resumed flying in November 2011 following the return of the aircraft. The maintenance cost USD 1 million, but other accumulated expenses brought the total bill to USD 3 million, which the Tanzanian government paid in September 2011.[40]

News media reported in November 2011 that Air Tanzania had leased a Fokker F28 aircraft from JetLink Express on a standby basis in case its only operational airplane is incapacitated. More aircraft would be procured over the next several months and years, according to the airline's business plan shared with the media.[40]

On 21 November 2011, Air Tanzania began negotiations with Export Development Canada (EDC) to explore how EDC could assist the airline to acquire more aircraft from Bombardier, a Canadian airplane manufacturer.[41] Those negotiations, however, "fizzled out".[42]

The leased B737-500

Aerovista leased a Boeing 737-500 to Air Tanzania on 29 March 2012 to enhance the airline's service delivery in the short-term. In early August 2012, Air Tanzania suspended the contract with Aerovista and returned the aircraft. The only other aircraft in the fleet, a Bombardier Q300, was stored for maintenance, which caused the airline to suspend operations and rebook passengers to other carriers.[43] Air Tanzania returned to the skies on 12 October 2012 with a 32-year-old Boeing 737-200. The aircraft was leased for three months from Star Air Cargo in South Africa.[44] The 737 arrived in Dar es Salaam on 11 October 2012 in Air Tanzania livery and started operations the following day.

In late 2012, the Controller and Auditor General of Tanzania, Ludovick Utouh, recommended the criminal prosecution of three former managers of ATCL for the 2007 lease of the Airbus A320 from Wallis Trading Company, a Lebanese company. He said there was massive misappropriation and mismanagement of the leasing agreement, resulting in an accumulated debt of US $41.4 million by October 2012, all of which is guaranteed by the government.[45] The aircraft was in ATCL's possession for 48 months, but it spent 41 of those months in France undergoing a major maintenance.[46]

Air Tanzania restarted operations to Kigoma on 10 January 2013, by using its Bombardier Q300. The airline has plans to begin operating flights to Arusha, Songwe, Zanzibar, and Mwanza.[47]

In January 2013, the chairman of Al Hayat Development and Investment Company (AHDIC), Sheikh Salim Al-Harthyan, announced plans for an Omani investment corporation to invest USD 100 million in Air Tanzania. The money would be used to build an airline training centre and offices for Air Tanzania, buy aircraft, and engage in other development activities that would begin before the end of 2013.[48] In August 2013, AHDIC promised to provide four Embraer175 and four Bombardiers to Air Tanzania. The Sheikh also said that the original USD 100 million investment would be increased gradually.[49] But in May 2014, the newsmedia reported no progress had been made and that AHDIC might not be a real company.[50] Sixteen days later, however, AHDIC reaffirmed its interest in the original deal.[51]

In May 2016, The EastAfricanreported that Air Tanzania, which operates a single, leased CRJ 200, which seats 50 passengers, was seeking funds to buy or lease four aircraft in the next 24 months in order to expand operations.[52]
In September 2016 two Bombardier Q400 planes purchased by the government of Tanzania landed at Julius Nyerere International Airport (JNIA) from Canada.[53]

Corporate affairs

Ownership

Business trends

Financial and other figures for Air Tanzania are not formally published on a regular basis, and (as at February 2012) their accounts for 2008, 2009 and 2010 are still "in discussion with the auditors".[54] Based on various press reports, government documents and statements by officials, recent trends are:

Future plans

An Omani investment consortium plans to bring in eight aircraft, which includes Bombardier for domestic routes; Embraer 175 for regional routes such as Burundi, the Democratic Republic of the Congo, Kenya and Uganda; and an Airbus A330 for intercontinental destinations such as China and London–Heathrow.[67][68]

Historic fleet

Accidents and incidents

1 March 2010: An Air Tanzania Boeing 737-200 (5H-MVZ) skidded off a wet runway while attempting to land at Mwanza Airport. Its nose wheel collapsed and its hull and righthand engine were damaged, but no injuries were reported.[72] The aircraft proved too expensive to repair and is stored in Mwanza pending resolution of a claim with the airline's insurer.[73]

8 April 2012: An Air Tanzania de Havilland Canada DHC-8-311Q (5H-MWG) crashed while trying to take-off at Kigoma airport. No one was injured, but the aircraft was irreparably damaged.[74][75]